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Commerzbank offloading EMC business to Societe Generale

Staff Writer | July 4, 2018
Commerzbank has reached an agreement to sell its Equity Markets & Commodities (EMC) business to Societe Generale.
Acquisition   The transaction remained subject to pre-clearance
The company said the transaction remained subject to pre-clearance with competent tax authorities, approval by further relevant authorities and the employee representative committees as well as the finalisation of legal documentation.

It said it marked a "further milestone" in the execution of the 'Commerzbank 4.0' strategy, which the board had implemented in a bid to reduce the bank's overall complexity and free up capital for investment in Commerzbank's core franchise.

The transaction would include the transfer of EMC's trading books and client franchise, staff, as well as parts of the IT infrastructure.

EMC front office employees and certain associated support function staff would move to Societe Generale, subject to approval by employee representative committees.

The transfer of trading books and its associated balance sheet and revenue implications were expected to take place "gradually", and to start at the end of 2018.

As a result, EMC revenues were expected to "fade out" in the profit and loss statement of Commerzbank during 2019, the board reported.

The reduction of expenses associated to Commerzbank's EMC business was estimated to reduce the bank's cost base by at least €200m by year-end 2020.